Instruments drawn to the special attention of the House:
Air Navigation (Amendment) Order 2021 (SI 2021/879)
Date laid: 28 July 2021
Parliamentary procedure: negative
The Order requires the Civil Aviation Authority to be notified of existing or planned obstacles in flight paths, changes to the height or presence of obstacles en-route and the fitting or removal of warning lights, with non-compliance subject to a Level 4 fine (£2,500). The Order brings these changes into effect from 6 September 2021, which is seven years after the Air Accident Investigation Board (AAIB) investigation into the helicopter which crashed into a crane on a tower being constructed in Vauxhall. We found the Department for Transport’s explanation for the delay unconvincing, in particular the long gaps between the individual decision points. We draw the attention of the House to the Department’s failure to implement both the original EU legislation and the recommendations of the accident investigation. We will be seeking further explanation from the responsible minister in oral evidence.
This Order is drawn to the special attention of the House on the ground that it is politically or legally important and gives rise to issues of public policy likely to be of interest to the House.
1.Among a number of minor consequential changes (for example, implementing Space Act 2018 provisions concerning rocket authorisation and protected zones around space sites), this instrument includes provision to require the notification of tall structures in flight paths.
2.The Order requires the Civil Aviation Authority (CAA) to be notified of existing or planned obstacles en-route, changes to the height or presence of en-route obstacles and the fitting or removal of warning lights, with non-compliance subject to a Level 4 fine (£2,500).
3.The Order brings these changes into effect from 6 September 2021, which is seven years after the Air Accident Investigation Board (AAIB) investigation into the helicopter which crashed into a crane on a tower being constructed in Vauxhall. The AAIB report recommended a better notification system be implemented.1 It is also 11 years after Commission Regulation (EU) 73/2010 of 26 January 2010 for the single European Sky laid down requirements on the “accuracy, resolution and integrity of aeronautical data”: the AAIB recommendation refers directly to this Regulation.
“Safety Recommendation 2014–027: It is recommended that the Department for Transport implement, as soon as practicable, a mechanism compliant with Regulation (EU) 73/2010 and applicable to the whole of the UK for the formal reporting and management of obstacle data, including a requirement to report data relating to newly permitted developments.
Date Safety Recommendation made: 9 September 2014”.
4.The Explanatory Memorandum (EM) states that “Currently the UK aims to meet those standards through the Ministry of Defence’s Defence Geographic Centre (DGC) database of en-route obstacles. However, this information is collected through best endeavour practices, such as military pilots’ reports and research, and is not complete.” (EM para 7.8)
Reasons for the delayed implementation
5.The Committee asked the Department for Transport (DfT) why it had taken so long to take action. The Department said:
“Whilst SI 879 introduces a straightforward ANO provision, establishing that an ANO amendment was the optimal way forward to address the AAIB recommendation was less straightforward and some time elapsed whilst the DfT investigated options to address the recommendation before it was decided to proceed with an ANO amendment. Investigations involved the DfT consulting with other government departments, and HSE to consider whether an appropriate solution should fall under the remit of the Health and Safety at Work Act. Other parties are also considered to have some interest or authority in this area or are directly involved in the en-route obstacle notification process (e.g. DGC, OS [Ordinance Survey] plus construction and renewables sectors) and engagement was required with all these stakeholders. During this time the CAA provided advice to the DfT on potential industry consultation and implementation issues and impacts arising from proposed solutions.
Despite much work by the DfT and CAA, a solution to address the AAIB recommendation was not forthcoming and the issue was identified on the CAA’s corporate risk register. To address this, the DfT confirmed that it would support the CAA’s proposal of an ANO Amendment introducing a mandatory requirement for notification of en-route obstacles. Once this decision had been made the CAA was able to begin scoping the task and liaising more closely with key stakeholders such as the MoD, OS and industry. This required much informal consultation which resulted in feedback that was critical in enabling the CAA to propose the resourcing and technical requirements that would be needed to manage the anticipated increase in workload following an ANO amendment.
The DfT accepted the CAA proposal and an ANO amendment was targeted for submission at the October 2019 ANO session. However, the submission was not made in October 2019 and this can be attributed to conflicting events (e.g. Thomas Cook collapse, post-transition BREXIT preparations etc) which took priority both CAA and DfT which meant that other projects such as this ANO amendment were delayed. Aligned to establishing the ANO amendment was the need for the CAA to recruit and train new resources, develop and implement a new system for the notification of obstacles, and to conduct effective stakeholder communication. Progressing these activities has also been a challenge for the CAA since late 2019.
In conclusion it is the shared view of the CAA and the DfT that the time taken to implement a solution to the AAIB recommendation results from the due diligence necessary to identify an appropriate solution, the complexity of stakeholder engagement required, the logistical challenges around implementation, and the impact to scheduled priorities caused by unforeseen events.”
Conclusion
6.We found DfT’s explanation for the delay unconvincing, in particular the long gaps between the individual decision points. This is a serious matter of aviation and public safety that has been handled in a “best endeavours” fashion which the DfT acknowledges is incomplete.
7.We draw the attention of the House to the Department’s failure to implement both the original EU legislation and the recommendations of the accident investigation. We will be seeking further explanation from the responsible minister in oral evidence. Considering our extensive correspondence with the Maritime Division of DfT about its delays in implementing legislation, we may also press the Department on the way it prioritises its legislative programme.
Drivers’ Hours and Tachographs (Temporary Exceptions) (No. 2) Regulations 2021 (SI 2021/921)
Date laid: 6 August 2021
Parliamentary procedure: negative
To ensure critical supply chains are maintained, these Regulations have been laid by the Department of Transport (DfT) to extend to 4 October 2021 certain relaxations of the normal rules on Heavy Goods Vehicles Drivers’ hours, which were brought in administratively on 12 July. The net effect of which is to increase the fortnightly driving limit from 90 hours to 99 hours. These relaxations are not restricted to essential supplies, however, and those consulted were evenly divided on whether these measures would reduce supply chain pressure.
Our 44th Report of last session drew attention to similar Regulations, which were debated in March, because we were concerned that drivers might feel under pressure to use this extension in hours. Data in this report from recent DVSA sampling shows that there are fairly high levels of non-compliance with the drivers’ hours regime, and DfT was unable to distinguish whether or not those in breach had applied to use these extensions. We reiterate our concern that the normal restrictions on drivers’ hours are based on accident statistics, so for safety reasons we would not wish to see their relaxation repeatedly extended. The House may therefore wish to ask DfT what other strategies it proposes to increase the number of HGV drivers trained and operating in Britain to provide a permanent solution.
These Regulations are drawn to the special attention of the House on the ground that they are politically or legally important and give rise to issues of public policy likely to be of interest to the House.
8.These Regulations were laid by the Department for Transport (DfT) on 6 August 2021 and brought into effect on 9 August to extend similar administrative provisions which had been in place since 12 July. The extension is for eight weeks, ending on 4 October.
9.DfT states that, the temporary exceptions permit either:
“the normally permitted increase to the daily driving limit from 9 hours to 10 hours (allowed up to twice in one week) to be replaced with a permitted increase to the daily driving limit from 9 hours to 11 hours (allowed up to twice in one week). All other daily driving limits remain at 9 hours; or
the requirement to take at least one regular weekly rest period of at least 45 hours in a 2-week period is replaced with an alternative pattern of weekly rest periods, as specified, and an increase to the fortnightly driving limit from 90 hours to 99 hours. This enables two reduced weekly rest periods of at least 24 hours to be taken in consecutive weeks. The alternative pattern of weekly rest periods may be taken as follows:
(a) both weekly rest periods in a 2-week period (which can under the normal rules be one of at least 45 hours and one of at least 24 hours) can be replaced by two reduced weekly rest periods of at least 24 hours
(b) following this, two regular weekly rest periods of at least 45 hours must be taken. However, any reduction in weekly rest shall be compensated for in the normal way by an equivalent period of rest taken before the end of the third week following the week in question
(c) in addition, any rest taken as compensation for a reduced weekly rest period shall be attached to a regular weekly rest period of at least 45 hours (which can be split over two regular weekly rest periods).”
Reasons for permitting longer hours
10.These provisions are complex but mirror the relaxation of hours applied from December 2020 to March 2021 by previous Regulations.2 The earlier Regulations lapsed on 31 March 2021. However, it was found necessary to make another administrative exemption to allow these relaxations from 12 July to 8 August while the current Regulations were prepared. In supplementary material DfT explained why :
“The SoS for Transport received an official request for temporary exceptions to the Drivers’ Hours rules from the Secretary of State for Environment, Food, and Rural Affairs (“SoS EFRA”) on 26 June 2021. This was in response to evidence provided by their stakeholders of the impact to their industry resulting from an acute shortage of lorry drivers on supply chains. In addition, stakeholders had verbally indicated the likelihood of additional supply chain pressures with the planned end of the England lockdown on 19 July 2021 and the summer holiday period. Based on the evidence and the industry request supported by the SoS EFRA, the SoS for Transport decided to grant temporary exceptions. Given the time required to lay an SI, officials advised initially granting temporary exceptions administratively for four-weeks, as this could be put in place to cover the anticipated additional pressures.
During the initial four-week administrative temporary exceptions, officials conducted a targeted stakeholder Call for Evidence as part of considering whether the temporary exceptions should be extended beyond the initially planned end date of 8 August 2021. Based on the results of the Call for Evidence and considering other inputs received (updated evidence from supply chain stakeholders, over 400 notifications from operators intending to use the initial temporary exceptions, the risk of drivers being required to self-isolate), the SoS for Transport decided to extend the temporary exceptions for a further eight-weeks. To ensure that there was no gap between the end of the initial temporary exceptions period and the extension, officials worked to a severely compressed timeline to get the necessary SI laid on 6 August 2021. There was no opportunity to lay the SI any earlier.”
11.The description in the Explanatory Memorandum (EM) of the consultation exercise shows that the outcome was fairly evenly divided: 47% of respondents agreed or strongly agreed that the exceptions would reduce supply chain pressure, while 43% disagreed or strongly disagreed.
Risk to road safety
12.DfT argues that safety will not be compromised because “enforcement of compliance with the Drivers’ Hours Regulation is managed by the Driver and Vehicle Standards Agency (DVSA). DVSA will be undertaking targeted checks at the roadside and at operator premises to ensure compliance with the requirements of the temporary exceptions.”
13.In our 44th Report, in relation to the previous Regulations we said:
“The House may wish to ask for an analysis of the outcome of the DVSA checks to be reported to Parliament so that members can form a view as to whether the system has been abused.”
14.We were disappointed to see that the EM to this second instrument did not provide any evidence of how the regime operated under the previous Regulations. We therefore asked for information on the DVSA’s checks, the DfT responded:
“Between the period of 12 July and 5 August 2021, the DVSA have conducted 1,425 checks of drivers’ hours records for lorries registered in Great Britain. During those checks, 411 drivers’ hours offences were identified to have taken place either on the day in question or the previous 28 days. This led to the issuance of 140 fixed penalties at the road. There were a total of 28 prohibitions (i.e. an ongoing offence) identified where the driver has either exceeded the maximum number of hours they can drive in a period, or has failed to take sufficient rest periods. Note that there is no system in place to identify how many (if any) of those prohibitions were for a driver operating under the temporary exceptions.”
15.Of 1425 roadside checks, 411 offences were identified (29%). Of these 140 offences (9.8% of the total number stopped) were sufficiently bad to warrant the issuing of a penalty, including 28 penalties (2%) that required the driver to be prohibited from continuing his journey. These are not insignificant figures.
16.It seemed an obvious oversight that there was no system in place to identify how many of those penalties were for a driver operating under the temporary exceptions. DfT has told us:
“As of 9 August 2021, the DVSA have introduced an additional check as part of their roadside encounters to ask the lorry driver if they are operating under a drivers’ hours temporary exception. This is checked against records of operators that have notified us of their intent to make use of the temporary exceptions as part of assessing whether a drivers’ hours offence has occurred.
In addition, the DVSA have begun off-road checks on operators that have notified us of their intent to use the temporary exceptions. The DVSA are conducting checks on approximately 20% of operators using a risk-based process, contacting higher risk operators first. These checks include asking the operator what mitigations they have put in place to address driver welfare and road safety concerns when using the temporary exceptions. If they fail to respond or the DVSA are not satisfied with the response, the DVSA will undertake further checks.”
Conclusion
17.We note that a significant percentage of drivers stopped were exceeding their permitted hours, although DVSA is unclear whether their employer had applied for an extension under these rules. We question how effectively DfT can legislate without a good understanding of what is happening on the roads.3 It is not clear to us whether this permissive scheme is effective or just adds to the administrative burden on obedient firms while their competitors fail to comply.
18.This is the second relaxation of the drivers’ hours rules this year, and we remain concerned that this should not become an accepted norm. The House expressed similar concerns during a debate on the previous relaxation regulations.4 Although, in paragraph 7.7 of the EM, DfT states that its published guidance reminds employers that they have a duty to ensure the driver does not drive when tired, the employers are also subject to a number of commercial pressures. We have noted the number of recent media reports of significant lorry crashes and the House may wish to ask how many of these can be attributed to overtired drivers. We reiterate our concern that the normal restrictions on drivers’ hours are based on accident statistics so, for safety reasons, we would not wish to see their relaxation repeatedly extended.
19.Although the EM refers to “critical supply chains”, we note that the legislation makes no distinction between food and fuel supplies and other goods. Recent news reports indicate that supermarkets and medical supplies are being affected by the UK shortage of lorry drivers which is now reported to be around 100,000.5 The House may therefore wish to ask DfT what other strategies it proposes to increase the number of HGV drivers trained and operating in Britain to provide a permanent solution.
Public Interest Merger Reference (Cobham Ultra Acquisitions Ltd. and Ultra Electronics Holdings plc) (Pre-emptive Action) Order 2021 (SI 2021/944)
Date laid: 18 August 2021
Parliamentary procedure: negative
This Order intervenes in the proposed takeover of UK defence company Ultra Electronics Holdings plc (“Ultra”) by US owned Cobham Ultra Acquisitions Limited on the ground of national security. The Competition and Markets Authority (CMA) will investigate the proposals and report to the Secretary of State by 18 January 2022 who will then decide whether to clear the merger or refer it to the CMA for a more in-depth review. The Order uses powers under the Enterprise Act 2002 to prevent pre-emptive actions by the parties to the merger, such as the transfer of information relating to goods or services supplied by Ultra to the Government or armed forces. New takeover rules under the National Security and Investment Act 2021 will come into force on 4 January 2022. Given the commercial significance of the proposed takeover and the national security implications that will be considered following the Department’s intervention, the House may wish to explore with the Minister the approach the Government have taken with this Order.
The Order is drawn to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of interest to the House.
20.The Department for Business, Energy and Industrial Strategy (BEIS) has laid this Order with an Explanatory Memorandum (EM). The purpose of the instrument is to intervene in the proposed takeover of UK defence company Ultra Electronics Holdings plc (“Ultra”) by Cobham Ultra Acquisitions Limited (“Cobham”), which is owned by US private equity company Advent International (“Advent”), on the ground of national security. The Government previously cleared the takeover of UK defence company Cobham plc by AI Convoy Bidco Limited, an indirect subsidiary of Advent, in 2019.6
Background
21.According to BEIS, the Secretary of State for Business, Energy and Industrial Strategy has the power under section 42 of the Enterprise Act 2002 (“the 2002 Act”), to issue a notice intervening in certain merger transactions where, amongst other things, a specified public interest consideration may be relevant. National security is a specified public interest consideration; other specified public interest considerations relate to media plurality and financial stability.
22.Under paragraph 2 of Schedule 7 to the 2002 Act, the Secretary of State also has the power, where an intervention notice is in force, to make an order prohibiting or restricting actions which the Secretary of State considers would constitute “pre-emptive action” and imposing obligations regarding the continuing of activities or the safeguarding of assets.
23.While the 2002 Act refers to a “relevant merger situation” which constitutes two or more enterprises ceasing to be distinct, this may be a mutual decision of two companies to combine or one company purchasing another. In this specific merger situation, the intervention relates to a proposed takeover of Ultra by Cobham.
24.New rules about takeovers which could harm the UK’s national security were introduced by the National Security and Investment Act 2021 which received Royal Assent on 29 April 2021. The new rules will come into force on 4 January 2022.
Use of powers under the 2002 Act
25.Following the issuing of an intervention notice under the 2002 Act, the Competition and Markets Authority (CMA) will now have until 18 January 2022 to investigate the proposed takeover of Ultra by Cobham, and to report to the Secretary of State on its national security implications and any relevant competition issues. The Secretary of State will then decide whether to clear the proposed merger, including by accepting any undertakings from the merger parties that would seek to mitigate any national security risks, or refer the merger to a more detailed Phase 2 investigation by the CMA under section 45 of the 2002 Act. In the meantime, the Order prevents any disclosure or transfer of information relating to goods or services supplied by Ultra to the UK Government or the armed forces or to other persons that are used in goods and services provided to the UK Government or armed forces, pending the outcome of the public interest intervention.
Commercial and national security context
26.The EM states that for national security reasons, “it would not be appropriate to provide any further detailed information regarding the grounds for the intervention, nor the specific actions which are prevented by the making of this Order”. We asked the Department, however, for further information about the commercial significance and national security aspects of the proposed takeover. BEIS told us that:
“Ultra Electronics Holdings plc (Ultra) employ over 4,600 people worldwide, with c. 1,700 in the UK across at least 10 main sites. We believe that over 1,000 of their UK jobs are in manufacturing and engineering, the remainder in sales and support. Ultra’s business units include maritime & communications, and critical detection and control. For the financial year ended 31 December 2020, revenue for the Ultra Group was £860 million, of which 64 per cent. was generated from sales to North America and 18 per cent. was generated from sales to the UK.
Ultra provides a range of important goods and services to the UK Government including to the Ministry of Defence and armed forces. Possible national security risks could arise from maintaining the supply of those goods and services and preserving the confidentiality of the details of the goods and services provided.”
Timing of the instrument
27.The Order was made and came into force before being laid before Parliament. The Department says that this was necessary to protect national security by preventing the parties to the merger from taking any actions that might undermine the purpose and effectiveness of the Order. As required,7 BEIS notified the Lord Speaker when the Order was made of the fact that copies of the Order had yet to be laid before Parliament and explained the reasons for this approach.
Conclusion
28.There has been considerable interest in past takeovers of UK defence businesses by foreign companies, including the takeover of Cobham which the Government cleared at the end of 2019, and in the context of new takeover rules under the National Security and Investment Act 2021 which will come into force on 4 January 2022. Given the commercial significance of the proposed takeover and the national security implications that will be considered following the Department’s intervention, the House may wish to explore with the Minister the approach the Government have taken with this Order. The Order is drawn to the special attention of the House on the ground that it gives rise to issues of public policy likely to be of interest to the House.
1 AAIB, Aircraft Accident Report 3/2014 - Agusta A109E, G-CRST on 16 January 2013 (9 September 2014): https://www.gov.uk/aaib-reports/aar-3-2014-g-crst-16-january-2013 [accessed 8 September 2021].
2 ‘Drivers’ Hours and Tachographs (Temporary Exceptions) Regulations 2021 (SI 2021/58)’, 44th Report, Session 2019–21 (HL Paper 220).
3 BBC News, ‘How serious is the shortage of lorry drivers?’ (2 September 2021): https://www.bbc.co.uk/news/57810729 [accessed 8 September 2021].
4 There were three separate motions on the previous Regulations which were debated together: HL Deb, 18 March 2021, cols 482-496.
5 BBC News, ‘Tesco and Iceland bosses warn over Christmas supplies’ (25 August 2021): https://www.bbc.co.uk/news/business-58329439?at_medium=RSS&at_campaign=KARANGA [accessed 8 September 2021]; BBC News, ‘NHS stops some blood tests due to vial shortages’ (26 August 2021): https://www.bbc.co.uk/news/business-58324108 [accessed 8 September 2021].
6 BEIS, Proposed acquisition of Cobham PLC by AI Convoy Bidco Limited: decision notice (20 December 2019): https://www.gov.uk/government/publications/proposed-acquisition-of-cobham-plc-by-ai-convoy-bidco-limited-decision-notice [accessed 7 September 2021].
7 The National Archives, Statutory Instrument Practice: 5th edition (November 2017): http://www.legislation.gov.uk/pdfs/StatutoryInstrumentPractice_5th_Edition.pdf [accessed 8 September 2021].